J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiatio… read more

Comments

When offered a raise of 10%, while the rest of the people are offered a 20% raise, some people, given the choice, would choose for everyone one to get zero raise rather than accept the higher absolute raise, but lower relative ranking.

This type of thinking about relative power and position drives the political class that assumes that everyone is primarily motivated by envy. Hence, the political class continued attempts to split nations, communities and groups into "us vs them" or "haves vs havenots" and suggest that all our real human problems would be solved if we just pulled "them" down while elevating the politican.

However, to someone like me whose absolute income (social security + interest from banks on saving) put me in the bottom half of the income distribution, I find the wealth in having the knowledge of the world at my fingertips exceeds all other sources of income. I celebrate when someone makes a billion dollars providing me with access to the world. His status may go up, but my human capital also increases at no cost to me beyond using Google Scholar.

There is a certain irony about the great concern about economic inequality by political economists who, like Picketty, are worried about economic dynasties forming and becoming a permanent ruling class. All evidence suggests that economic empires founded upon the business creativity of the founder eventually get squandered by the grand children in all societies, but political dynasties seem to go on forever with each generation being able to steal almost anything they want.

Yes, the average citizen is far better off in absolute terms but humans, being insanely status oriented, do not think in absolute terms.

There have been many studies that show that happiness is a function of relative status and people are even willing to give things up if it means that somehow they have relatively more than someone else.

The psychology of economics is as important as the mechanics of economics, if we truly want to improve the well being of the irrational humans.

One interesting question is where does this insane status desire originate from. My guess is that humans, being a hierarchical herd species, have had the concept of hierarchical position evolutionarily ingrained into the species from millions of years ago.

And when I say that humans are insanely status oriented, that is exactly what I mean. A human bereft of status can become irrational and dangerous.. Read more

DeLong ignores the power that goes with all the money. So do economists generally. When wealth is as unequal as it is in the US, the holders can and do use it to abuse the rest of us through financial crises, support for continual war, and stirring up divisive hatred, all to conceal their plunder. They subvert the government to serve them at the expense of the rest of us. For example, they arrange the rules of "markets" to benefit them. They put ideologues on courts, fulfilling Posner's words that the rich are kept in line through tort law; the rest of us are criminals.

Then they insulate themselves and their favored minions from accountability for their predatory and murderous behavior.

In DeLong's world, you have it great if you are content to stuff your face with Cinnabons and watch the boob tube while your kids are mentally starved. Read more

Or is it just a way to keep the masses amused while the super rich keep taking more? What plans are being made for the automation of the workforce which is surely coming? What plans are being made to improve nutrition. A nutritious diet is more expensive than a fatty diet and our population is showing it through obesity. There is more to life than being entertained on your couch. Read more

I'm going to stand with Gimel Wicaksono on this one. i think the popular view of inequality, and one that most economists and politicians seem attracted to, is that inequality is primarily about wealth and income.

For some time I have relied on the Quality of Life Index from The Economist as a better basis for discussing equality. Somewhat interesting to me and about which I need to find out more, is the Social Progress Index.

Years ago, in a presentation, I wondered whether being always on, always connected, always transacting was a good thing. I think not. I think that it leads to a lower quality of in my life.

When one turns from the smile of a grandson to the flicker of the screen one moves a bit to the left in the distribution of equality. Read more

If anything, I think that more actively appreciating some of the main things you point out could itself be a free-lunch mental trick whereby we get more value out of things that we already take for granted. But you could say that about, well, just about anything. Read more

In case you want less inequality, come to Europe, Mr DeLong. And in case you want theatralic entertainment, get puzzled by the "Panopticon Puzzle" (http://goo.gl/XfPkAF) and try to unpuzzle yourself.

A further interconnection lies in the fact that the NSA and its homologons in other countries represent the "aliens" inside the tower of the panopticon from where they can watch everybody and everything. For those readers who are mathematically inclined, the conditions of the puzzle are isomorphic to a Turing machine with "The imitation game" being (in my opinion) a strong recommendation for the movies.

In any case, glad to see your radiant optimism about the technological change. Personally I find the web 2.0 and the fact that people can comment politics and thus develop an alternative to the mainstream media especially enlightening. Read more

Is there some reason why we can't have less inequality and the internet? Or is DeLong just trying to illustrate how bad inequality can be, that dissatisfaction with it can completely offset the good done by the internet? Read more

What a convoluted, circuitous comment. I wish Brad Delong would spend some time studying Paul Krugman's comments to see how to write clearly, to make an argument. Perhaps standards in Berkeley's econ dept. are slipping? Read more

Well, in term of quality of life, we are definitely better than decades ago, but in term of inequality, we are not. Prof. DeLong has expressed this clearly and I agree with Him on several isues. One important thing that He raised up is about time usage and wealth. Surely the rich can have everything but at the same time they also surely cannot enjoy everything they own with suitable time attached to it unless they sacrifice some of their other precious time, working time to increase their wealth. Most of the rich has very little time for themselves but vast accumulation of physical wealth. The rich are absolutely wealthy in that manner but not necessarily rich in their spiritual being. Many of them face family problems so severe that they cannot sleep well without thinking about it. Is that what we call the real wealth? At some point in our accumulation of wealth, we would think that having a good family relationship will be much more peace-mind objective and that is difficult to deny considering humans are social in their nature. Currently I live in a big house without my family for some period of time. I have everything I can dream of, but I have few friends that can share my hobby, very few friends to talk with and lack the presence of my family for a short period of time and that makes me realizing that the real wealth is not physical wealth but physical and spiritual wealth supported by networks of friends and families which working coherently to shift you into higher level of joy and happiness. That is the real wealth. Read more

The current rage against inequality is nothing to do with having inferior stuff to the Joneses next door and everything to do with the way in which it happens - essentially by unjustly enriching the 0.1% at the expense of the rest. This 0.1% who have a kowtowing entourage of media and economists whose job it is to suggest that nothing is wrong at all, or perhaps only that we are ungrateful of the ability to watch unlimited amounts of mind numbing garbage on Youtube or Facebook. Read more

After reading the teaser on this article I must say that I was tremendously disappointed. I was hoping to find new and innovative ways that the internet is being and can be used for education and eventually a tool of social mobility. Sadly the article just contemplates what I personally have long considered the great dumbing-down of society; a world where facebook likes and mindless time-wasting seem only to perpetuate this inequality. Read more

Brad's only guessing, but where in the world could he come up with such an equation where envy 'neutralizes' the advantages of infotech? My late Mum taught at Berkeley, and I know they have a comprehensive health plan...Brad should check it out. Read more

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